Arizona Real Estate License Practice Exam 2025 - Free Real Estate Practice Questions and Study Guide

The seller's credit at closing for an existing mortgage deduction relates specifically to transactions involving existing loan assumptions. In this context, when a buyer assumes the existing mortgage of the seller, the seller can provide a credit to the buyer at closing. This credit typically reflects the amount that the buyer would save due to the existing mortgage’s favorable terms compared to current market rates.

Assuming an existing loan can be beneficial for the buyer, as it often allows them to take advantage of lower interest rates or favorable terms set before market conditions changed. Since the loan is already in place, the seller's credit acts as a financial incentive for the buyer to purchase the property with that existing financing rather than obtaining a new loan.

In contrast, other options like the sale of personal property, favorable market conditions, or a new mortgage application do not directly relate to the concept of crediting an existing mortgage at closing. These options represent different aspects of real estate transactions that do not involve the seller providing financial assistance linked to the existing loan the buyer is assuming.